Construction has started on the first stage of the Housing Foundation’s development on a 3.2-hectare site on the Ōmokoroa peninsular, north of Tauranga.
Foundation chief executive Dominic Foote said the first stage was expected to be finished by March with the development complete by 2026.
Two, three and four-bedroom homes were included, most of them terraced and two-storey.
A visualisation of how Ōmokoroa's shared home ownership development could look.
With the first homes due to go on sale next year, prices had not yet been set but Foote said the goal was to make them affordable for low-to-middle income earners.
Seventy homes would be available to buy in a partnership with the foundation, with a 3-5% deposit and an affordable mortgage. The other 30 would be sold on the open market to help fund the scheme.
Buyers initially bought at least a 60% share in their home and could buy out the foundation’s share over time.
The foundation was established in 2007 and the shared-ownership scheme was thought to be among the first offered in the Bay of Plenty.
The region has been vying with Auckland for the country’s most expensive average weekly rent for months, based on the Trade Me Index. In April the Bay was ahead by $10 on $690, with this reversed in May.
Foote told the Bay of Plenty Times $110,000 was the maximum household income to be eligible to buy a home under the foundation’s shared-ownership scheme.
He said the foundation helped families develop a financial plan and they would not be spending more than 30% of their gross income on mortgage payments.
This would be about $33,000 a year or $600 a week for a household on $110,000.
“We tailor the housing cost through a mortgage to their income so it remains affordable to them,” Foote said.
Housing Foundation chief executive Dominic Foote.
A 5% deposit was needed but Foote said they make an agreement at 3% or 4% if the household’s income was on the lower end.
“If they have KiwiSaver, they can withdraw from it and that often is more than enough to get them to that 5%.”
Families had 15 years to buy out the housing provider, and there was a modest annual management fee.
Foote said the longest it had taken for a family to buy the foundation out was 12 years, and the average time was five to seven years.
“All families are determined to own the home.”
The foundation reinvested the money into building more homes, and had build about 1,000 such homes in Auckland, Northland, Christchurch and the Coromandel.
Foote said their earliest example of the model was built in 2007 in Glen Eden, Auckland and a majority of the families stayed after owning the home.
“That’s part of what we want to do – create a community vibe where people love living in the home.”
Foote said the scheme was popular overseas, especially in the United Kingdom, but not in New Zealand.
“I think there’s a lack of understanding about how well it works.”
He said the foundation was funded through government and philanthropic investment and some bank lending.
It hoped to expand to other areas in the Bay of Plenty, such as Rotorua, but he said it would not be able to without more funding.
A growing community
The development was one of several construction projects on the Ōmokoroa peninsula, where the population was expected to grow to 13,000 residents by 2050.
Annelie Badenhorst, Western Bay of Plenty District Council infrastructure growth and delivery manager, said the council had been working on a series of projects – roading, recreation, cycleways, stormwater, building and planning – to support growth for several years.
The $23.5 million upgrade of Prole Rd was underway and would enable the development of 2500 new homes in Ōmokoroa.
Access to the road from via Ōmokoroa Rd would be closed to light traffic on weekdays between 7am and 5.30pm from next week. A detour would be in place.
The reconstruction of Prole Rd, which included the 1.7km from Ōmokoroa Road to Waipapa River was expected to be complete between late this year and early 2025.
Early works had also started on the $43m million State Highway 2 / Ōmokoroa Road intersection upgrade.
When the upgrade was complete, more than 900 new homes were expected by 2029 – including a mix of standalone homes, affordable homes and medium-density housing.
